Betting Against Ourselves

I hate insurance. It’s the most expensive thing a person can purchase that you hope you never have to use. But I will admit that it can help you sleep a little better. Our boat is our home and our most valuable asset, and while we have confidence in our sailing ability and know our skills will only increase with time, accidents do happen. We’ve heard that Cuba has lately been taking a Sargent Schultz¹ attitude to coverage, but many marinas do want to see proof that you at least carry liability insurance before letting you enjoy their facilities.

We’ve always carried an agreed value policy from USAA on our boats. The policy is actually from Progressive, but if you call them directly, they’ll tell you that they won’t insure boats as big as ours. It’s because we’re USAA members that we can get the coverage we have. As boat policies go, it’s a pretty good one, with the annual cost of coverage running in the 2% of agreed value range. Anything less than 3% can probably be considered “affordable.” USAA is also known for stellar customer service, which fortunately we’ve never had to test as we’ve never filed a claim on our marine policy.

There’s one big showstopper though with our current insurance—we’re only covered for coastal waters within 75 miles of the mainland US. But our plans are quite a bit more far ranging than that. Even travel to the Bahamas would require an additional rider that would push the policy beyond the “good deal” range. The Caribbean isn’t even an option.

Some people go without insurance. I mean, how hard would it really be to go pirate and photoshop up some kind of insurance declaration page that you could give to a marina in Mexico or Grenada that makes it look like you’re covered if they asked? It’s not like they’re going to actually call the states to verify the policy (I believe…). Since we own our boat and don’t have to jump through some bank’s hoops, we could go without insurance if we wished. But there’s still that issue about being able to sleep at night, so not carrying insurance on our home isn’t a viable option for us. We knew that before we left for our Life On The Hook™, we were going to have to tackle obtaining coverage. While researching our options we came across a great post on the sailing blog Where The Coconuts Grow that was titled What Marine Insurance Companies Don’t Want You To Know.

WTCG

Among other things, the post included the contact information for an  insurance broker in Dunedin, Florida called The Pegasus Group. They offer policies backed by Lloyd’s of London, among others. Intrigued by the prospect of insuring with the same company that covers the Queen Elizabeth II, I gave them a call and asked for a quote.

Since this is a post about insurance (yawn), I won’t drag this out. We now have a policy from London International Marine, backed by Lloyd’s of London. It’s an agreed value policy that covers 100% of the replacement cost of our boat in the event of a loss, along with coverage for our tender (dinghy), and the usual liability, medical, and pollution coverage. The deductibles are pretty small, and amazingly the total cost came out to be just about exactly what we were paying Progressive (USAA) for our previous continental-US-only policy  We’re covered for the entire Caribbean, Gulf of Mexico and the Bahamas, with the only exclusions being Cuba, Haiti, Venezuela and mainland Columbia. Of course, since we have Cuba in our sights, I asked what a two week Cuba rider would cost. Less than $100, they replied (!). Since LIM and Lloyd’s aren’t US based companies, they can legally write insurance for Cuba. Best of all, there is no hurricane box restriction. None of that “have to be north of here or south of there between June and November or you’re not covered” nonsense. Imagine that—an insurance policy that will actually let us use our judgement on where it’s safe to sail during hurricane season rather than dictating arbitrary requirements!

We did have to provide a survey to obtain the policy, but they gladly accepted our pre-purchase survey from March of 2014 rather than require us to have a new one done. A brief search online turned up posts by others claiming Pegasus had accepted surveys up to five years old. If you’d like to talk to the folks at The Pegasus Group to see what they may be able to do for you, you can reach them at (336)280-4312, and their website is here:

The Pegasus Group

So as I said, I really hate insurance. It feels like you’re betting against yourself, because the only time it benefits you is in the event of a disaster. But we accept it as a necessary evil, and value the peace of mind it provides. And with our newly issued policy, we’ve now checked off another box on our departure checklist!

¹For our international readers—Sargent Schultz was a character in the 1960’s television comedy Hogan’s Heros, set in the  fictional WWII German POW camp Stalag 13. When confronted with evidence of wrongdoing by the Allied prisoners he guarded, he continually said, “I see nothing! I know nothing!”

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